Assume That Dusty Has $30 in Income,the Price of a Loaf

question 39

Multiple Choice

Assume that Dusty has $30 in income,the price of a loaf of bread is $1.50,and the price of a jar of peanut butter is $3.
Suppose that at the original income of $30 the price of a loaf of bread increased to $3.00 and the price of a jar of peanut butter decreased to $2.Dusty can buy a maximum of _____ loaves of bread or a maximum of _____ jars of peanut butter.

• A)10,15
• B)15,10
• C)20,15
• D)15,20

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Definitions:

Lerner Index

A measure of a firm's market power, calculated as the difference between price and marginal cost divided by price.

Elastic

Describes demand that is highly sensitive to changes in price, meaning that quantity demanded can significantly increase or decrease as prices change.

Average Cost

The total cost of production divided by the number of goods produced, representing the per-unit cost.

Marginal Revenue

The boosted income realized by vending one extra unit of a good or service.